Genghis Weekly Strategy - 20th April 2020
In this week's edition of the Weekly Strategy Report, we give a recap of the equities and fixed income markets' performance over the past week and our trading ideas for the coming week. Our Momentum, Income and Value equities portfolios continue to outperform the benchmark NSE 20 index. Performance of the Momentum and Income portfolios was ahead of all the benchmark indices including the Nairobi All Share Index (NASI). Genghis Trading Ideas for the week…
Equities
We released our second quarter 2020 equity investment strategy and outlook last week. The key takeaways and recommendations from the report is that as uncertainty in global macros continue to persist into the second quarter, investors should position their portfolios towards stocks with strong balance sheets to weather the pandemic and to accelerate growth in earnings post COVID-19. We like our Momentum portfolio given that it is poised to gain the most if the situation continues to improve and our income portfolio due to its defensiveness and currently trading cum-dividend in almost all its constituents giving investors an almost immediate cash return above 8% (our dividend yield threshold).
Fixed Income
SELL FXD1/2019/5 at 11.00% levels. We expect demand to continue shoring on the shorter end of the yield curve. Although there is an ongoing TAP Sale on the recently issued infrastructure bond, we do not expect most of the rejected aggressive bids (+28bps above average accepted rate) to plug the deficit (KES 21Bn). In this environment, we expect elevated appetite for short-term papers and investors should offload FXD1/2019/5 at 11.0% levels.
Genghis Capital is an innovative and customer focused Investment Bank licensed by the Capital Markets Authority (CMA). Founded in 2008, Genghis is one of the leading investment banks in Kenya. Since its establishment, Genghis has achieved tremendous growth to offer a well-diversified portfolio of financial services that includes:
- i. Securities(Equity/Debt) Trading
- ii. Research
- iii. Wealth Management services
- iv. Investment Advisory & Management via the GenCap Unit Trusts
- v. Corporate Finance & Transaction Advisory services
The Kenyan Capital Markets continue to develop in size, scope and sophistication. With this is an increasing demand for more specialized and personalized brokerage service and we at Genghis Capital are glad to be able to offer you this service. Our strength lies in ensuring our clients are up to speed with developments at the stock market and the economy. Research and technology remains our competitive and comparative advantage hence Experience, Expertise and Professionalism are some of the qualities you can expect from our team.
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